Working Paper: NBER ID: w21742
Authors: Richard Schmalensee; Robert Stavins
Abstract: This essay provides an overview of the major emissions trading programs of the past thirty years on which significant documentation exists, and draws a number of important lessons for future applications of this environmental policy instrument. References to a larger number of other emissions trading programs that have been implemented or proposed are included
Keywords: cap-and-trade; emissions trading; environmental policy; pollution control
JEL Codes: Q40; Q48; Q54; Q58
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| EPA's leaded gasoline phasedown program (L94) | reduction in lead emissions (Q52) |
| trading of lead credits (F16) | incentivized early reductions (H23) |
| SO2 allowance trading program (Q58) | reduction in SO2 emissions (Q52) |
| SO2 allowance trading program (Q58) | high compliance rates (H26) |
| accurate emissions monitoring and penalties for noncompliance (Q58) | high compliance rates (H26) |
| Regional Greenhouse Gas Initiative (RGGI) (Q58) | generated significant revenue (H27) |
| California's AB32 cap-and-trade system (Q58) | integrated auction mechanisms and free allocation of allowances (D44) |